Mutual fund investment plans are gaining popularity today due to its benefits of professional management, hassle free investing and power of compounding. Online mutual fund is the primary reason why more and more potential investors are choosing this way to start investing their hard earned savings. It is convenient for them as with time and patience, mutual funds can help one complete their desired financial goals. Mutual funds returns are superior over other investment plans and one can easily calculate the returns using a mutual fund return calculator.
Though a lot of reasons can be listed, here are five broad reasons why one should invest in Mutual Fund investment plans -
Investment in Equities - Wealth creation in the long term is no longer a challenge due to the option of investment in equity Mutual Funds which gives an investor direct access to the equity shares of listed companies across different sectors and market capitalization segments. It is always advised by financial planners to invest in equity MFs for not lesser than five years as the returns from such investments depend on the market trends and long term would only enhance the position of an investor in terms of the returns. Hence, if an investor is patient with his/her equity investments and takes help of an expert, wealth creation can be easy.
Systematic Investing - When financial plans are done in a systematic, timely manner, it can reap benefits, like no other form of investment. But, one needs to be patient and wise with every step of the process, which more often than not, investors are not and that can lead to incurring of losses. The two big advantages of SIPs is that, it does not require market timing. By investing at a regular frequency, one is always invested both at the high and the low points of the markets. SIPs work well in volatile markets, by averaging the rupee cost of the investment. The other benefit is that you can save systematically in a fund which suits your risk profile.
Expert Fund Management - By investing in mutual fund investment plans, you can leverage the experience and expertise of fund managers who are expert and experienced in picking the right instruments for your mutual fund scheme portfolio. They will assist you throughout the dynamic process of financial planning as well as execution so that it can be completed without hiccups and the best results.
Tax Efficient - Investors often ignore the impact of taxes while making investment decisions. Taxes reduce the net returns of investors, and therefore, investors must keep a bird’s eye on the effect of taxes in investments. If you have invested in equity or equity oriented mutual fund schemes, short term capital gains (investment held for <12 months) are taxed only at 15% + applicable Cess. Long term capital gains (investment held for >12 months) of up to Rs 1.00 Lakh is completely tax free.
In order to facilitate this process of investing in online mutual fund, tools like the mutual fund return calculator are used widely. These are simple tools that can help an investor know in seconds, the estimated value of their corpus, to understand whether it would be fruitful to make the investment or not.
In this article, we broadly focused on mutual funds and the strong reasons as to why one should invest in them.